For its part, the department has, in a separate filing now consolidated, asserted
that the magistrate erred in not awarding attorney fees to it under ORS 20.105. On that claim, the
department filed a Motion for Summary Judgment.

Here, taxpayer claims that some combination of common law, Internal Revenue
Code (IRC) section 1341, 42 USC section 1981, and section 23 of the 1939 IRC, allows him a
deduction of his "compensation for personal services actually rendered," such that, in calculating
his income tax liability, he may deduct the amount of compensation he received.

2. Taxpayer claims that 42 USC section 1981 provides an exemption or deduction from
income taxation for his wages. The court has reviewed that statute and sees nothing in it that
even remotely supports taxpayer's claim. The statute was originally part of post-Civil War
reconstruction legislation and is essentially an anti-discrimination statute with no application to
substantive tax provisions.

4. IRC section 1341 is a relief provision designed to address the situation where a
taxpayer includes income in one year because of an apparent right to such income, and in a later
year determines such income was not properly that of taxpayer. In such instances, the statute
provides a method for calculating tax liability in the later year if a deduction is allowed in that
year. That statute does not apply to taxpayer's situation because he is not claiming a deduction in
1999 for income included in a prior year return to which he was not, in fact, entitled.

Taxpayer, again employing limited and selective focus to justify an attractive but
unreasonable conclusion, seizes upon the language of ORS 316.167(2), which provides:

"Except in the case of an agricultural employee, the amount withheld shall be
computed on the basis of the total amount of wages and the number of withholding
exemptions claimed by the employee, without deduction for any amount withheld."

5. Taxpayer has repeatedly asserted that the statute provides for employee control of
the withholding function insofar as it states that withholding is to be based on the "number of
withholding exemptions claimed" by the employee. Id. Taxpayer ignores, however, the
provisions of ORS 316.162(2), which defines the phrase "number of withholding exemptions
claimed" as used in ORS 316.162 to 316.212 as meaning:

"the number of withholding exemptions claimed in a withholding exemption
certificate in effect under ORS 316.182, except that if no such certificate is in effect,
the number of withholding exemptions claimed is considered to be zero."

6. Those rules promulgated by the department under ORS 316.182 are within the scope of that statute, reasonable and valid. The statute does not
specifically delineate rules on treatment of certain withholding certificates. However, the
provisions of the department's rule are consistent with the statutory concern expressed in ORS
316.182 and ORS 316.177 that the department be able to avoid, and in some cases punish,
employee exemption designations where there is a lack of adequate foundation for a claim of
complete exemption or a high number of exemptions.

In the case of taxpayer, his repeated assertions of frivolous positions on the
taxability of wages certainly created a proper context for the department to question his
certificate. (7) To the extent that certificate was based on the positions he maintained through
his initial Complaint in this court, those have been rejected as frivolous. To the extent any
certificate claiming total exemption was based on the arguments taxpayer made in his Complaint
filed in the Regular Division in this case, they are in this opinion found to be frivolous and
without foundation. The simple fact is that, based on the information available to it, the
department was completely justified in rejecting the exemption claim. At that point, it perhaps
could have considered no certificate to be in effect and could have required withholding based on
no withholding exemptions. Instead it permitted withholding based on five or seven exemptions.
Taxpayer may not complain as to the substance of those actions.

7. The department requested an award of attorney fees in the Magistrate Division
based on the provisions of ORS 20.105. The magistrate denied that request and the department
renews the request here by way of a Motion for Summary Judgment in TC 4605. A similar claim
is made by motion in TC 4604. Without addressing the question of whether the magistrate was
required by statute to award attorney fees, the court concludes that the department is entitled to
an award of attorney fees under ORS 20.105 with respect to the proceedings in this division and
in the Magistrate Division. This court finds that the department is the prevailing party in this
matter and that the claims and grounds for appeal asserted by taxpayer throughout this
proceeding, in the Magistrate Division and in the Regular Division, have no objectively
reasonable basis. Taxpayer has based his claims on selective reading of statutes without attention
to the whole statutory context. He imports to words and statutes his subjective views as to
meaning without any support in relevant legal authority or an objectively reasonable construction
of words and phrases. His conclusions as to the ultimate issue of the duty of a citizen to pay
income tax on wages are the same as those already rejected on many occasions. The only new
feature is that the result of no tax liability is achieved by way of a spurious claim of a deduction,
rather than by way of a claim for exemption.

III. CONCLUSION

Article I, section 10, of the Oregon Constitution provides that the courts of Oregon
are open. Frivolous use of them comes, however, at a cost. Now, therefore,

IT IS ORDERED that the Department of Revenue's Motion to Dismiss is granted,
and

IT IS FURTHER ORDERED that the Department of Revenue is awarded
damages in the amount of $5,000, and

IT IS FURTHER ORDERED that the Department of Revenue is awarded attorney
fees, and

IT IS FURTHER ORDERED that the Department of Revenue's Motion for
Summary Judgment in TC 4605 is denied as moot, and

IT IS FURTHER ORDERED that taxpayer's motion to set trial date is denied as
moot, and

IT IS FURTHER ORDERED that taxpayer's motion for leave to amend complaint
is denied as moot.

1. All references to the Oregon Revised Statutes (ORS) and Oregon Administrative Rules (OAR) are to 1999.
Unless otherwise noted, references to the Internal Revenue Code (IRC) are to the IRC of 1986, as amended.

3. Taxpayer cites Redfield v. Fisher, 135 Or 180, 292 P 813 (1930) reh'g den, 135 Or 205, 295 P 461 (1931) for
the proposition that an individual, unlike a corporation, may not be taxed for the mere privilege of existing. He then
extends that statement to encompass the act of earning a living. That extension is erroneous. The court in Redfield
knew of, and in no way questioned, the then existing Oregon tax on the income of individuals.

4. Taxpayer's resort to section 23 of the 1939 IRC appears to be based on the reference to the 1939 IRC found in
section 1341. That reference, however, is not to substantive provisions but only to the rate brackets. Taxpayer in
reference to the 1939 IRC also refers to a deduction for "personal labor." The court assumes he means to be
consistent with the statutory reference to "personal services."

5. Taxpayer also attempts to base his claim on actions taken by the federal government on making a tentative
refund to him for 1999. Quite apart from the fact that the refund action does not appear to be final, a lack of action
by the federal government is not determinative in Oregon. See Detrick v. Dept. of Rev., 311 Or 152, 156, 806 P2d
682 (1991) (the department's power to impose a deficiency assessment is not dependent on the Internal Revenue Service having done so).

8. Of course, if the department had required withholding in excess of ultimate liability, taxpayer would have had
a right to a refund with interest from the time of a return filing. ORS 314.415; ORS 316.187.

9. An objectively reasonable basis for an argument does not exist simply because some statute or statutory
language exists. The construction of the statute proposed by taxpayer must be objectively reasonable. At a
minimum, an objectively reasonable construction would be supported by prior case law (especially in an area so
basic as the taxation of wages) or a plain reading of the statute. In this case, rather than case law supporting
taxpayer, there is case law that finds certain positions of taxpayer frivolous. See Detrick v. Dept. of Rev., 311 Or
152, 156, 806 P2d 682 (1991) (The taxpayers' assertion that the department must await action by federal government
before issuing assessment entirely devoid of factual or legal support).